JOHANNESBURG – South Africa’s rand slipped early on Wednesday, as a renewed slide in the Turkish lira dented appetite for emerging market assets and boosted safe-haven demand.
At 0630 GMT, the rand traded 0.2 percent weaker at 14.2800 versus the U.S. dollar, which struck a 13-month peak against a basket of major currencies.
The rand, one of the most-traded emerging market currencies, is highly susceptible to swings in sentiment on global markets.
The unit is down around 6 percent in the past week as investors have dumped assets seen as risky in the wake of the Turkish lira’s precipitous plunge.
The lira is down more than 16 percent over the past week and fell around 0.5 percent by 0630 GMT, hurt by worries over President Tayyip Erdogan’s calls for lower interest rates and worsening ties with the United States.
Analysts have said the rand is likely to recover once fears over the Turkish economy recede.
South Africa has a narrower current account deficit and smaller stock of short-term external debt than Turkey, and the economy is expected to grow modestly this year after a torrid first quarter.
NKC Research said it expected the rand to trade in a range of 14.20 to 14.50 to the dollar on Wednesday.
Government bonds were little changed in early deals, with the yield on the benchmark government bond maturing in 2026 up 1 basis point at 8.955 percent. – Reuters Africa